UK and European stocks are flat to lower this morning. Investors are weighing yesterday’s higher-than-expected UK and US inflation data along with Fed Chair Jerome Powell’s calming comments that it was still too early to reduce support for the US economy. At the same time Powell acknowledged that inflation was rising at a faster pace than anticipated.
Dave Ramsden, BoE’s Deputy Governor said UK inflation will likely peak close to 4%, which may indicate to investors that monetary policy will have to be tightened.
Data released today shows that the UK unemployment rate increased to 4.8% in three months to May, slightly higher than forecasted.
China’s gross domestic product (GDP) rose 7.9% on a year-on-year basis, in Q2, which indicates a sharp slowing from the record 18.3% in Q1.
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